Ford Motor Co. (F) has announced the creation of a new business unit – Ford Middle East and Africa – effective Jan 1, 2014. The unit will cover the company’s automotive business in 47 Ford markets in the North Africa, Sub-Saharan Africa, South Africa and Middle East regions.
The unit will be divided into two sub-regions – South Africa and Sub-Saharan Africa, and the Middle East and North Africa – for efficient management. The new business unit will be headquartered in Dubai along with a regional office each in the city and South Africa.
Currently, Ford reports its financial results in four business segments – Ford North America, Ford South America, Ford Europe and Ford Asia Pacific Africa. These segments form its Automotive sector, while the Financial Services sector comprises Ford Motor Credit Company and Other Financial Services reporting segments.
The new unit is being created to capitalize on the growing importance of the Middle East and African markets, which are expected to witness strong growth. The combined region is expected to witness a 40% surge in industry sales to 5.5 million by 2020.
Ford witnessed a 20% year-over-year increase in sales in the Middle East in the first nine months of 2013. Sales of the Ford and Lincoln brands in the region have surged 60% over the last 4 years.
To strengthen its foothold in this lucrative market, Ford will launch 17 new or revamped cars under the Ford and Lincoln brands in the next 2 years. These include the Ford Fusion sedan and the EcoSport small SUV that were showcased at the 2013 Dubai International Motor Show on Nov 5.
Additionally, Ford is concentrating on developing a strong dealer network to provide efficient customer service in the region. The company is also focusing on making customer support and car parts easily accessible in the region.
Jim Benintende, currently the director of Ford Export Operations and Global Growth Initiatives, will manage the operations of the new business unit.
Ford currently carries a Zacks Rank #1 (Strong Buy). Other major automobile stocks worth considering are Fox Factory Holding Corp. (FOXF), General Motors Company (GM) and Daimler AG (DDAIF). While Daimler is a Zacks Rank #1 stock, the other two carry a Zacks Rank #2 (Buy).